We all work hard to ensure that our children get the best there can be in life. However, without a proper financial plan towards their secured future, all the efforts can easily go to waste.
Are you feeling overwhelmed and uncertain about where and how to plan appropriately? The below steps will help you to secure not only your children’s future but also protect your wealth.
Start by taking control of your future
Yes, you heard that right. It may sound counterintuitive as this post is geared primarily towards safeguarding your children’s future. However, the truth is that it’s practically impossible to set your child up for success if your welfare and that of your spouse are not in order.
The following are a few simple tips to take care of your future:
- Draft a will
This should be a priority for anyone above 18 years and with something they own. Luckily, the process of filing a will is often simple and can even be completed online.
- Buy life insurance
Only a few things can help to express your love for your family like getting a term life insurance policy. This cover allows you to sleep soundly knowing that should the unexpected happen, the futures of your child and spouse are secured. Get a quote now from Simply Insurance.
- Save for your retirement
It is every parent’s wish that they will not burden their children financially in their old age. If this sounds like you, consider investing in a pretax retirement plan – your child will love you more for this.
Now take care of your child’s future
Once you’ve addressed the key areas we’ve outlined above, you’re now ready to begin investing in the future of your little one. Below are some of the vital steps to take:
- Be a teacher and a role model
Having learned the art of keeping finances in check yourself, it pays to pass the same knowledge to your child so that they too can be financially savvy from a tender age. Explain to them the need to delay gratification and the importance of saving before acquiring expensive items such as clothing or video games. More importantly, let them learn from your individual actions including how you manage your debts, budget, and plan for your estates among others.
- Adjust your budget
Raising a child is expensive. In most cases, you’ll need to adjust your budget to accommodate the needs of the new family member(s). However, if you’re looking to maintain your current standard of living, try to find ways to grow your income. The other strategy would be to cut down on some of the expenses you deem to be unnecessary. You can then save that money for your emergencies.
- Start saving for their college fees
Yes, we can hear you mutter, but my child is not even old enough for school, let alone college. Why should I start saving this early? The truth is time runs quite fast and education keeps getting more expensive every year. Open a savings account now and start paying for your little one’s education in the future.
If your employer offers direct deposit into a college/university savings account, take advantage of this provision as it gets easier to automate the process.
- Identify their ambitions and save for them
Sometimes it’s easy to get fixated on saving for college and forget that life experiences and extramural activities also play a vital role in the overall development of your child. Start saving for these activities which can range from hobbies, travels and trips, and even weddings. Of course, you’ll need to place a limit on what to build into your budget to ensure that you’re not spoiling your baby in the name of care and love. Engage your family in this and decide together on what is essential and what’s not.
- Open a child’s saving account for them
An effective way of instilling good money behaviors in your children is by showing them how to manage their own money. Open a child’s saving account and allow your little one to take charge of their pocket money. It is through such actions that they can get a better understanding of money matters like interest rates and how to use debit cards among others.
- Update beneficiary information
After major life events such as the birth of a child or divorce occur, one of the first things you ought to do is to update your beneficiary information. This includes ensuring the beneficiary designation is updated properly and aligned with your bank account, life insurance cover, and any retirement accounts available. It’s also recommended to name an extra beneficiary to take the place of the primary heir in the event the latter predeceases you.